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The government’s healthcare reforms will raise a huge number of workforce issues. Jodie Sinclair and David Widdowson examine five key areas that HR teams will need to consider.
The far reaching changes proposed by the Government White Paper Equity and Excellence: Liberating the NHS will have major implications for workforce management, particularly given that the reforms will be implemented at the same time as the NHS faces a substantial financial challenge, management cuts and significant service reconfiguration to achieve efficiencies.
The emphasis in the reforms is a greater focus on competition, patient choice, contracting and public reporting of outcomes to achieve better quality care, but what about the workers? Although the publication is short on detail, given that part of the strategy is to cut bureaucracy and improve efficiency the changes that are being proposed clearly contemplate savings in manpower – but precisely how these are to be achieved remains to be seen.
For the moment there are five particular areas of interest to HR teams.
Commissioning – does TUPE apply?
The proposed transfer of commissioning responsibilities to GP consortia and the establishment of a new NHS Commissioning Board will mean that Primary Care Trusts and Strategic Health Authorities will not continue. The commissioning functions which they carry out, however, will continue to need to be done which will give rise to the possibility of TUPE transfers.
To the extent that a local commissioning function which is now carried out by an individual or team within a PCT passes to a GP consortium, then the starting point on TUPE is that the people concerned would transfer with that. However, complications will arise if the functions do not transfer in that way. For example, if a PCT currently structures itself by having teams of people looking at specific treatments, such as cancer services or orthopaedic treatment, across its geographical area a number of GP consortia taking over the commissioning function from the PCT will be focused presumably on smaller geographical areas. In such a scenario, this will give rise to the potential argument that the staff currently in the PCT are not ‘assigned’ to the commissioning function which is transferring to a particular consortium.
It would be difficult to lay down any rules of general application here and it is likely that each will have to be reviewed on its own facts. If there are TUPE transfers then the normal position will be that the GP consortium will inherit those staff on the same terms and conditions by which they were employed by the PCT or SHA and will be responsible for the cost of any redundancy payments which may become necessary. That could represent a very significant transfer of redundancy liability from the public sector to GPs who are essentially private partnerships.
In addition, a GP consortium will be carrying out public functions and as such subject to the provisions of the current equality laws requiring promotion of equality in terms of gender, race and disability. It will also be covered by the extended provisions of the Equality Act that came into force in October. That will require GPs to ensure that the provisions of the legislation are at the forefront of their minds when dealing with issues such as priorities.
Public health and partnering
It is clear from the White Paper that there will be a significant increase in the areas in which local authorities and NHS Trusts collaborate. Again, TUPE will be central to this process from a workforce point of view and the provisions of the Cabinet Office Statement of Practice (if this continues to remain in force) will require Trusts to ensure that proper pension arrangements are available. Will the present restrictions on the use of secondments in these cases be relaxed to facilitate this?
Additionally, clear structures and robust operational HR practices for managing staff working under joint or collaborative arrangements will be imperative in order to deliver the service whilst achieving improved productivity and the required efficiencies.
Providers and employee involvement
The White Paper sets out the intention for all NHS Trusts to become Foundation Trusts by 2013/2014 and speaks of greater employee involvement in the future of the organisations in which they work. It appears that the current “Right to Request” scheme for all PCT staff working in provider arms will be extended where staff will be given the opportunity to transform their organisations into employee-led social enterprises that they themselves control, enabling them to use their front line skills and experience in structuring and delivering services for patients.
With the separation of commissioner and provider arms to continue under Transforming Community Services and be completed by April 2011, thereby potentially seeing the emergence of more social enterprises in the coming months, workforce implications will include TUPE considerations, alternative governance structures to those currently existing, and pension arrangements.
Local pay
It is proposed that there be a move to greater emphasis on local pay arrangements as well as ‘leading negotiations on new employment contracts’. Although this will be no doubt be attractive to many Trusts, it is not without its difficulties and it remains to be seen how this will be achieved. The standard principle that contracts of employment cannot be changed without the consent of the employees will continue so that it will not be possible for a Trust simply to impose new contracts or, for that matter, new pay arrangements unless and until the existing structures are dismantled by agreement. Nonetheless the direction of travel here will no doubt be welcomed by many employers.
Pensions
An independent review of public pensions has been proposed and there is an intriguing reference in this context to ‘the extent to which pensions may act as a barrier to greater plurality of provision of public services’. Private sector health care employers have long pointed to the obligations on NHS Trusts to ensure the equivalent pension arrangements in any situation where services are transferred to the private sector or elsewhere within the public sector as one factor which prevents a level playing field. This obligation arises not from TUPE but from the Cabinet Office Statement of Practice on Staff Transfers in the Public Sector which is not a legal document but simply persuasive guidance to which Trusts should have regard.
If that were to be withdrawn then the standard position is that TUPE would apply – provisions relating to pensions and old age benefits are an exception to the rule that all rights and liabilities under the contract of employment pass on a TUPE transfer which would mean that private sector providers would no longer have the considerable expense of establishing and maintaining a pension scheme for former NHS employees. If that were to happen it would no doubt attract very strong opposition from the trade unions who have already indicated their intention to take action to prevent any attempt to adversely affect their members pension entitlement.
These are interesting times indeed for HR teams and a clearer picture will no doubt emerge as the proposals in the White Paper go through the consultative process. What does seem certain is that workforce issues will be very much to the fore and we can only encourage HR teams to be fully conversant and ready to deal with the workforce implications that are likely to arise.
Jodie Sinclair and David Widdowson are partners at Bevan Brittan (www.bevanbrittan.com). They can be contacted by email at
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Ensuring high quality healthcare services for children and young people is a key part of the coalition government's plans. Helen Burnell looks at recent developments.
The government set out a new vision for the health of children and young people on 16 September 2010 in an engagement document which can be found here. This was published alongside the much anticipated report of Professor Sir Ian Kennedy, Getting It Right for Children and Young People: Overcoming Cultural Barriers in the NHS so as to meet their needs. Readers will recall that that Sir Ian was commissioned to undertake the report, following the death of Baby P.
Achieving Equity and Excellence for Children
This document forms the opening part of an ongoing dialogue on how to ensure high quality services for children and young people. It is a detailed supplement to the ongoing consultation on the White Paper, Equity and Excellence: Liberating the NHS.
Andrew Lansley, Secretary of State for Health, states that the government (informed by Sir Ian’s report and in line with the new focus in the White Paper on patient-centred care) intends to ensure that it shapes the future of children and young people’s services to meet their needs more effectively by improving health outcomes to be amongst the best in the world, through more devolved, locally integrated service provision.
Achieving Equity and Excellence for Children outlines that it endeavours to:
- personalise services to individual needs which are appropriate for children, young people and their families;
- ensure that age specific information becomes routinely available and accessible;
- ensure that children, young people and their families are at the centre of the design and delivery of services, facilitated by local professionals; and
- ensure that improvements are measured in terms of outcomes for children and young people rather than just time-focussed targets.
The vision focuses on the objectives outlined in the White Paper.
Further important points from an NHS perspective include:
- NHS outcomes will be underpinned by quality standards formulated by NICE. Any specific considerations relating to children and young people should be an “automatic ingredient” of the standard, where appropriate.
- There will be an increased focus on the transition between children’s and adult services.
- Partnership working is again a focus of attention. The government states that it intends to lay down firm foundations for joint working and that the key responsibilities for organisations that will be responsible for child health are being set down following the reforms outlined in the White Paper.
- There will also be a focus on local commissioning.
- Children’s Trusts will be restructured in order to reduce bureaucracy. This includes a legislative timetable to abolish the need for a joint children and young people’s plan and to withdraw the statutory guidance relating to Children’s Trusts.
- Every organisation must also be clear about its own responsibilities in the field of safeguarding. PCTs and SHAs have responsibilities for safeguarding set out in statute. The government proposes that those duties should pass onto the GP consortia and the NHS Commissioning Board in due course. The government is also considering the links which would be necessary between Local Safeguarding Children’s Boards (LSCBs) and proposed Health and Well-Being Boards. This will be considered further in the report being undertaken for the Department of Education by Professor Munro. The government is considering a core accountability framework in relation to safeguarding via the Health Bill and we will keep readers updated in relation to this. As the vision outlines, this will be an important new role for GP consortia and one which will go beyond the experience of most existing GP commissioning groups. The NHS Commissioning Board will be responsible for overseeing the commissioning of NHS services for children and young people.
- Services should also consider the possibility that Gillick competent children and young people may not wish their parents to know that they are receiving healthcare or be involved in decisions about the healthcare they receive. This shows the increasing recognition of competent children’s autonomy in decision making.
- Health visitors warrant special mention as being well placed to help families to link to local communities and, where needed, to specialist care.
Professor Sir Ian Kennedy’s Report
Sir Ian’s report was published on the same day and key elements from his report have been incorporated into the Government’s vision for children and young people.
The report identifies a number of challenges concerning the quality of services alongside examples of areas of excellence. Overall, he has suggested in his report that child health services have received a “disproportionately low priority”.
It contains a detailed overview and analysis of the effectiveness of NHS services for children and young people. Sir Ian spoke to professionals in various roles and commented that he has seen enthusiasm, commitment and a real sense of caring and duty. The quality of services for children and young people varies across the country. Assessments have shown not only that a large number of services are in need of significant improvement but also, importantly, that there are some excellent services from which others might learn.
Sir Ian emphasises some important issues in promoting children’s health:
- Getting policy right.
- Considering change within the NHS including how services are configured in promoting positive health (e.g. addressing issues such as obesity, teenage pregnancy and substance abuse). Sir Ian also focuses on the need for the NHS to work in partnership.
Sir Ian outlines that the NHS must invest to save and invest because it is right to do so. His approach contemplates the integration of services, working collaboratively within the NHS and across other agencies. Savings will be made through greater efficiency, through co-location (and the benefits it brings) and through the joint planning and commissioning of services. His report endorses the need to empower professionals within the safeguarding arena.
Sir Ian outlined that his review has uncovered cultural barriers standing in the way of improving the services of the NHS for Children and Young People. These barriers were created and operate, at a number of levels, from Whitehall through regional and local organisations, to contacts between individual professionals and with children, young people and those looking after them.
Recommendations
Sir Ian’s recommendations include:
- Recommendation 1: Responsibility for policy relating to health and wellbeing of children and young people should be brought together in a single Government department. In addition to health and healthcare, this responsibility should extend to include as many other aspects of public services used by children and young people as possible.
- Recommendation 3: Funding for the health and healthcare of children and young people and ‘transition’ to adult hood must be identified, separated from the funding dedicated to the care of adults and transferred to the responsible Government department for further distribution to organisations at local levels.
- Recommendation 4: There should be dedicated local partnership in every local authority or similar area which is responsible for the planning and delivery of children and young people’s health and healthcare at the local level and for integrating these services into all of the services provided.
- Recommendation 9: The Local Partnership must create structures whereby the views of children and young people can be sought and taken account of in the planning and delivery of health and healthcare services.
- Recommendation 12: The Local Partnership should have a dedicated team drawn from NHS Commissioning organisations, local authorities and elsewhere, which is responsible for commissioning all services, including health and healthcare services, for children and young people.
- Recommendation 14: There should be a single point of access to the NHS’s services for children and young people through general practices or the hub of some form of poly-system.
- Recommendation 16: Information about the care of children and young people must be collected and consolidated at the central point of access, the general practice or the hub of some form of poly-system. It should be available to all who provide services for children and young people. Readers may recall previous concepts of a similar hue, for example, the now defunct ContactPoint.
- Recommendation 17: There should be a dedicated information officer in general practices or at the hub of poly-systems responsible for the collection, coordination and dissemination of information about the care and welfare of children and young people in the relevant area to those providing services/need to know.
- Recommendation 18: All GPs, practice nurses and other professionals attached to general practice or who form part of a poly-system should, as a matter of urgency, receive training in the comprehensive care of children and young people.
- Recommendation 19: The initial training for GPs, the Quality and Outcomes Framework and the system of revalidation should all incorporate the need for training and the comprehensive care of children and young people.
- Recommendation 20: General practices and those at the hub of poly-systems should seek to ensure that there is at least one professional who has specialised knowledge in the comprehensive care of children and young people.
- Recommendation 21: Urgent action is called for to respond to the mental health needs of children and young people. Mental health services must be available and accessible, including through self-referral, and be integrated with other services, particularly through schools.
- Recommendation 29: There should be a single criterion for measuring the quality of the NHS services for children and young people – satisfaction. There should be two elements to satisfaction: where the children and young people are satisfied with the outcome achieved, by reference to what they are able to judge; and whether the professionals should be satisfied, by reference to the current appropriate benchmarks of performance. The internal performance management and external regulation of the NHS must reflect this approach.
- Recommendation 32: Arrangements must be agreed, regarding funding and other matters, to address the changing needs of children and young people as they mature, including greater continuity of care into adulthood. Ensuring a smooth transition between children’s and adults’ services should be a priority for local commissioners.
- Recommendation 33: NHS services for children and young people should be designed, organised and delivered from the perspective of the child, young person and parent or carer. Relevant NHS services should regularly assess the expectations and views of children and young people using the services, and should take action in light of the findings, which should be made public.
Conclusion
Many of the recommendations/aspirations are not new, such as listening to children and young people. There has been an increase in recent years in feedback being made publicly available in relation to the NHS’ interface with children, e.g. the anonymised publication of executive summaries following serious case reviews. Formalising that process however is new. There is clearly a change of focus in some areas, including the impending responsibility of GP consortia and a single responsible department for children and young people.
We will watch with interest to see how clinical governance around child protection and commissioning decisions will continue to develop in line with the White Paper and the new vision.
Helen Burnell is an associate at Mills & Reeve. She can be contacted on 020 7648 9237 or via
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The government envisages a key role for Monitor to promote competition in the healthcare sector. Simon Taylor and Bleddyn Rees assess the plans.
The Department of Health is consulting on a range of radical initiatives linked to the Health White Paper. One of these, Liberating the NHS: regulating healthcare providers, concerns its proposal to establish Monitor as an economic regulator for the healthcare sector. Monitor will have the duty to licence providers of NHS funded services, set tariffs and promote competition in the health and social care sector.
The government's plans for competition in the NHS represent a step change in the move towards patient choice and contestability in the NHS. This briefing summarises the key changes and comments on their implications.
Choice and competition
The DH explains in Liberating the NHS: regulating healthcare providers (the Paper) that patient choice will be beneficial as it will make providers more responsive to patient's needs, stimulating innovation and improvements in the quality of care and increases in productivity.
Various measures will need to be taken to make patient choice a reality, including the provision of information and notably, regulatory oversight in order to promote competition.
It is therefore proposed to give Monitor a duty to promote competition, where appropriate and extend the scope of choice in the various areas set out in the White Paper.
Wragge & Co comment
The duty on the economic regulator to promote competition where appropriate is common to other regulated sectors in the UK. For example, Ofcom – the regulator for the communications sector – has a similar obligation, as well as a power concurrently with the Office of Fair Trading to enforce the Competition Act 1998.
But competition in the healthcare sector is different to other regulated sectors.
In most other regulated sectors, consumer choice is now taken for granted. It is a relatively new concept in the NHS. The public and patients are generally unclear of what services they are entitled to under the NHS.
In other sectors, the consumer pays for the service that it receives. In the NHS, the service is free at the point of delivery and is only paid for indirectly via taxation. So the scope for price competition is more limited.
The promotion of competition in healthcare and social care services may focus on those areas where patient choice can viably be introduced – and thus where there is competition (at least non-price competition) "in the market". This will include an increasing range of elective, diagnostic and other services.
Measures currently promoting competition in the NHS include the Choice Directions (Primary Care Trusts (Choice of Secondary Care Provider) Directions 2009). Some PCTs are already finding it challenging to balance their budgets and comply with the Choice Directions.
Choice in the NHS can be costly where, for example, a local provider is willing to offer elective procedures at or below cost to fill capacity. Monitor will also be set the objective of "making best use of limited NHS and adult social care resources" and there will be a difficult balancing act between short-term austerity measures and the longer term benefits of choice.
Choice will not be appropriate for services such as emergency, ambulance admissions to A&E, where referral to the local provider is automatic.
However, competition "for the market" may still be promoted – for example, by requiring that transparent and fair procurement procedures are followed before the A&E provider is commissioned in a particular area for a specified period.
It is not yet clear how far the promotion of competition for the market will be considered "appropriate". Nor is it yet clear where the boundaries between NHS and social care services are to be drawn.
Concurrent powers
The government is to give Monitor concurrent powers to enforce competition law in the UK health and social care sectors. The scope of these powers is therefore broader than its licensing powers which are limited to the licensing of providers of NHS funded services.
Monitor will have the power to enforce the Competition Act 1998 against the full range of healthcare providers in relation to their NHS and private healthcare and social care activities.
In addition, Monitor will have the power to carry out market studies and make referrals of dysfunctional markets in the health and social care sector to the Competition Commission for investigation. This power has been used in other sectors by the Office of Fair Trading (OFT) to refer, for example, the groceries sector to the Competition Commission.
Monitor will have the power under its general licensing powers to set not only general licence conditions (applicable to all providers of NHS funded services), but also special conditions for some providers.
The DH refers to incumbents and other providers having the ability to prevent choice and quality developing as a result of their powerful position. These special conditions may include obligations to accept or provide services in certain circumstances.
Wragge & Co comment
The Paper does not explore the question of whether, and how far, the Competition Act 1998 actually applies to NHS activities. Historically, the OFT has been reluctant to get involved in investigating conduct relating to NHS funded services.
Instead, the DH established the Cooperation and Competition panel (CCP) to help combat anti-competitive practices in relation to NHS funded services.
The CCP was tasked with advising Monitor and the DH on anti-competitive practices by NHS providers and commissioners. This is further to a code of conduct drawn up by the DH – the Principles and Rules of Cooperation and Competition (PRCC).
Compliance with the PRCC is encouraged by the threat of directions imposed by the Secretary of State (against NHS Acute Trusts and PCTs) or licence enforcement by Monitor (against NHS Foundation Trusts).
There is no means of enforcement of the PRCC against private sector providers, though they are clearly affected by the CCP's rulings.
The PRCC therefore currently exists in parallel to the competition law rules.
Conferring concurrent competition powers on Monitor marks a departure from the PRCC and a move towards embracing the application of the more coercive and independently enforced competition law into the NHS funded healthcare sector.
It seems likely that, in time, the PRCC will be disbanded in favour of guidance on the application of competition (and procurement) law in the sector.
Significant uncertainties remain. Competition law will only apply to the activities of "undertakings" as defined in UK and EU case law. That definition encompasses the activities of bodies which are operating on economic markets.
As patient choice expands and competition (whether in or for the market) for is promoted, there will be an increasing array of NHS markets and thus an increasing scope for the application of competition law. This will apply to both primary and secondary care services.
It is possible that the government will seek to limit the application of competition law to certain types of provider and activities. There is a sense in Europe that healthcare is culturally different to other markets and that the "solidarity" within a state funded system tends to indicate that the market players are not undertakings and can be subject to different rules.
But it seems likely that the move towards concurrency will simplify the UK rule framework by removing the need for the PRCC. It should also be more effective in safeguarding and promoting competition given the severity of the potential sanctions for competition law breaches (including fines of up to 10% of the turnover of the "undertakings" involved).
The provision for introducing special conditions where providers enjoy market power also replicates the position in other sectors. Notably, in the communications sector, the European Commission has introduced a "significant market power" mechanism for triggering the application of more onerous licence conditions.
Level playing field
The Paper refers to the fact that Monitor would be able to consider factors that may put particular providers at a relative disadvantage and make proposals to the government or the NHS Commissioning Board to ensure that any differences are fair.
Wragge & Co comment
This is a very brief reference to a much wider issue. One of the challenges faced by Monitor in promoting competition in the healthcare sector is that the types of provider who will be competing in the new markets have very different characteristics which may help or hinder their ability to compete fairly.
A case in point is the current restriction on a Foundation Trust's ability to provide services to private patients. This restriction is to be relaxed considerably under the new reforms. Foundations Trusts will thus be encouraged to find new sources of income.
At the same time, the independent sector may question some of the advantages enjoyed by, for example, Foundation Trusts in the market. These may include not only a position of incumbency, but also access to NHS staff pensions and NHS insurance cover.
As GPs expand into integrated care and private providers compete for primary care contracts, the advantages enjoyed by GPs, as well as their conduct on the market, may also come under increasing scrutiny.
The need to ensure a level playing field must be viewed in the context of the debate around ensuring competitive neutrality in mixed public/private markets. The OFT published a paper on this subject in July 2010, building on the 2006 CBI/Serco Institute Paper – A fair field and no favours: Competitive neutrality in UK public service markers.
The healthcare sector is one of the sectors where inherent advantages suffered by certain players in the market may lead to competitive distortions unless proactive action is taken.
There can be expected to be some significant proposals in this area, relating for example to the evaluation of public tenders or possible changes to taxation, pension and insurance arrangements. A further Wragge & Co briefing will be provided on the OFT's Competitive Neutrality paper.
Commissioner activity
The Paper notes that the government is to introduce legal duties on the NHS Commissioning Board and Commissioners to promote choice, act transparently and in a non-discriminatory manner in commissioning activities and to prohibit agreements or other actions to restrict competition against patients and taxpayers interests.
Monitor will have the power to investigate and remedy complaints relating to procurement decisions or other anti competitive conduct.
Wragge & Co comment
The area of commissioning and procurement is another which is currently regulated by the PRCC and the CCP, as well as by Strategic Health Authorities (SHAs). Current CCP rules provide that any providers unhappy with a tender process must pursue a complaint to the SHA with the right of appeal to the CCP.
Under public procurement law, healthcare is a Part B service and not therefore subject to the full rigour of the Public Contracts Regulations 2006. But Regulation 4 imposes a duty on contracting authorities to treat economic operators equally and in a non-discriminatory and transparent way.
And EU law principles require an advertised tender process where there is a "cross border effect" (for example, where a non-UK provider would be interested in the tender). These legal principles are enforced by the courts, but their application to NHS healthcare services has not yet been tested.
As with competition law, the PRCC relating to commissioning therefore currently operates in parallel to the public procurement law rules.
The Paper envisages the introduction of new legal rules and duties to be enforced by Monitor. However, the change may, in substance, be little more than the transfer of the Secretary of State's responsibility for enforcing the PRCC against NHS commissioners to Monitor. Going forward, this will involve taking action against GPs in their commissioning capacity and the relevant PRCC rules will need to be changed to reflect this.
The possibility of bringing a direct action in the courts under the generic public procurement rules will remain. Care will need to be taken to ensure that the new commissioning rules are consistent with public procurement law, given the need to avoid confusion and given the supremacy of EU law.
They key issue will be how market entry is to be fairly and transparently controlled. How will private providers gain access to markets that have been the traditional preserve of NHS Trusts? How will Foundation Trusts with a national reputation secure "out of area" referrals?
In areas where patient choice is being introduced, a flexible and dynamic accreditation system enabling all qualified and willing providers to operate may be the solution - without the need for local tender procedures. But if Monitor wants to enable price competition below a regulated tariff cap, then tenders will probably be needed (as the patient will not be influenced by the price in making his or her choice).
In other areas, where competition "for" the local market is a possibility, open tender procedures may be needed before contracts are placed (for example, with a provider of A&E services). This will be subject to exceptions where, for example, there is only one capable provider available.
Mergers
The government's proposals in relation to mergers are equally radical. It is envisaged that the OFT and Competition Commission are to have sole responsibility for investigating mergers in the health and social care sector.
Under current law, Monitor (in relation to Foundation Trust mergers) and the Secretary of State for Health (in relation to NHS Trust mergers) investigate and approve mergers, with the advice of the CCP on the competition implications. This has led to the CCP developing a complex merger control analysis in relation to NHS mergers, without there being any clear statutory basis for assessing the competition implications of mergers between NHS bodies.
Given that the Enterprise Act 2002 does not expressly take into account the specific characteristics of the health sector, the Paper recognises that modifications may be needed. The Paper notes, in particular, that these may seek to ensure that the full range of NHS providers are subject to the merger controls rules and that the Secretary of State (for Business Innovation & Skills) will be able to intervene in healthcare mergers on public interest grounds.
Wragge & Co comment
While the OFT has been involved in reviewing a number of mergers in the social care and private healthcare area, it has not to date looked at mergers involving NHS Healthcare Trusts. This will change under the new rules.
Reform, or at least guidance, may be needed to clarify that the definition of an "enterprise" under the Enterprise Act encompasses NHS Trusts and GP partnerships/consortia. This will highlight the fact that GP practices are effectively small businesses and consideration will need to be given to the competition and other implications of consolidation in this area.
Given the current roles of Monitor and the Secretary of State in relation to mergers between NHS Trusts and the evident need to take into consideration factors other than just competition, it seems likely that a specific healthcare related power of intervention will be introduced into the Enterprise Act.
This may not need an amendment to the primary legislation as the Secretary of State can issue an intervention notice in respect of a sector where he or she deems that a specified consideration (such as safeguarding the availability of key healthcare services) should be taken into account.
In conclusion, the government's White Paper and specifically its proposals for turning Monitor into an economic healthcare regulator are radical and wide ranging.
The NHS is already a mix of competition and monopoly provision, encompassing a wide range of providers including NHS Acute and Foundation Trusts, GPs, independent sector providers and third sector organisations. Economic interests are clearly already at stake and markets are developing. There is therefore already a role for competition and procurement law.
These new proposals will lend weight and specialist expertise to the application of competition and procurement law in the sector and should, in time, help enable the benefits of competition to be enjoyed.
Simon Taylor is an antitrust partner and Bleddyn Rees is head of public sector at Wragge & Co. Simon can be contacted on 020 7664 0382 and via
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The 'Big Society' appears to offer great opportunities for the third sector to become more involved in the delivery of public services, particularly healthcare. However, writes Ian Hempseed, it is in the early stages of its development by the coalition government and so far there is little detail to help boards of third sector organisations plan their response.
We take the lead from the publication of the White Paper: Equity and excellence: Liberating the NHS. This intends a plurality of providers in health by enabling commissioners to contract with the new concept of 'any willing provider' which could be a state, private or third sector enterprise. This is the time for third sector organisations to check that their business, governance and operational models are sufficiently robust to satisfy commissioners in what will be a competitive market.
'Localism' is likely to be a major driver in assessing 'willing providers', which raises its own challenges. National charities may need to show that they are already operating effectively in the locality and have the capability to engage with local stakeholders. On the other hand, the issue for some small local community organisations is that their business model and systems may never have been tested in delivering contracts, or contracts of the size which are to be commissioned. Whether there will be funds available to capacity build those organisations to make them fit for delivery could be a key concern.
Payment for services will be directed away from full cost recovery towards, especially in health, payment by results. Boards will need to watch how this concept develops. The concern would be that the contractual results are difficult to measure or can only be assessed a while after completion of the services and therefore, in addition to possible uncertainty of payment, this could create cash flow problems, particularly for smaller organisations which may not have the reserves or working capital to tide them over.
We can also take a lead from the proposed spin out from the public sector of new delivery organisations. The Department of Health has recently announced the second wave of 'Right to Request' where employees of Primary Care Trusts can request to set up a social enterprise to run public services. Also, on 12 August the Cabinet Office announced the first wave of public sector workers establishing 'John Lewis-style' employee-owned organisations to deliver public services. Boards of existing third sector organisations should be considering the implications. These new organisations could become their competitors.
However, in the immediate term there may be opportunities for existing organisations to provide support as the fledgling enterprises may need to fill skill gaps in management and business planning. Those organisations which have developed transportable models of governance, financial and accounting services, stakeholder engagement and specialist service delivery could offer a form of social franchising. In return for a fee, they could provide an agreed set of know-how and services under a brand with the recipient agreeing to adhere to quality standards.
The relationship could be expanded into a closer collaboration under which the franchisor could become a member of the organisation or make its expertise available through representatives on the board. Through closer collaboration, the franchisor might negotiate 'step-in' rights in exceptional circumstances of a serious service failure to ensure the viability of the franchisee and continuity of provision for users.
The NHS White Paper proposes consortia of GP practices commissioning on a statutory basis the great majority of NHS services. Many providers over the years will have built up good relations with managers at Primary Care Trusts. These new GP consortia will require legislation but in the meantime we strongly recommend that providers should be identifying and making contact with any Practice Based Commissioning Groups of GPs which have already been set up in their area. The new GP commissioning consortia will have a duty of public and patient involvement and therefore third sector organisations will have a key role to influence the design of services where GPs do not have the expertise in areas of care.
Ian Hempseed is a partner and head of third sector at Hempsons. He can be contacted on 020 7484 7530 or via